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Monday, 09 January 12
2012: WHAT WILL IT BRING FOR THE DRY BULK MARKET? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 A further increase in dry bulk demand could be the remedy for most of the industry's oversupply issues, together of course with the high level of scrapping activity, as observed during the course of 2011. According to the latest BIMCO report on 2012, a large part of this increase in demand could come from India and its coal needs. The report said that "the year 2011 had barely started before a series of unforeseen events took place across the globe. Most of them affected dry bulk shipping negatively and the large Capesize vessels were particularly under pressure. Amongst the events were the flooding in Australia and South Africa, the triple disaster in Japan and the “Arab Spring” that also affected the supply of oil into Europe.
Half a year down the road, during which many Capesize vessels had earned less than any other dry bulk vessel size, the unexpected happened again. Strong demand for iron ore and coal from China and the recovering Japan, sourced from Brazil and Australia, ignited freight rates for Capesize vessels. A tight tonnage situation in the Atlantic basin combined with increased congestion in loading and discharging ports pushed average rates above USD 30,000 per day.
A far cry from the peaks of the super cycle, but surely an indication of the peak levels we have in sight for the near- to mid-term future as the supply side remains a considerable burden for the industry. The demand side is set to be relatively stable in 2012 although it’s likely to grow somewhat slower than in 2011 – at least in volume terms. Overall iron ore demand is likely to slow. Still, a lower world market price as compared to the domestic costs of mining it within China holds the key to provide positive demand shocks for this valuable steel ingredient. Growing demand for thermal coal from large Asian consumers is said to be a steady demand driver" said BIMCO.
In a separate research report on the outlook of the dry bulk industry, DVB Bank said that the current dry bulk fleet now stands at 8,877 vessels (585.1mio dwt). The average age of the fleet is about 12 years and 59.1% of the fleet is less than 10 years of age. In addition, the average age of vessels less than 10 years old is merely 2.8 years – a very young fleet. Similarly, the orderbook stands at 2,371 vessels (196.3mio dwt) which equates to 33.6% of the current fleet. In dwt terms, large Capes constitute the largest portion of the current fleet while Panamax size vessels have the largest Orderbook. ULBC size range is expanding substantially. So far, three of the 34 Vale ULBCs of 400K+ dwt have delivered.DVB Bank said in its analysis that if the remaining 31 vessels actually deliver, this will have a huge negative impact on all large Cape asset values as well as T/C rates and impact earnings of other Sub-Sectors as well.
Looking at deliveries, a total of 366 vessels of 28.3 million dwt are still headed towards delivery, according to figures up to November of 2011. These vessels represent 14.4% of the orderbook. Given that for the most part these weren't expected to be delivered within 2011, the researcher said that they will be rolled over to 2012. So, it draws the conclusion that "even Even with 40% delays due to slippage, postponement and cancellation, we are poised to cross the 100mio dwt mark this year. In 2012, some 1,431 vessels (121.6mio dwt) are scheduled for delivery, which is about 62% of the current orderbook" said DVB Bank.
In total the dry bulk cargo demand is forecast to rise to approximatly 3.7 billion tons this year. But, as DVB states, the level of the orderbook is too much for it to be absorbed without problems and downward pressure both on ship values and freight rates. "Although scrapping picked up in 2011 to 21.4mio dwt (334 vessels) as of November, this figure is merely 3.5% of the existing fleet" said DVB Bank. It concluded that the vessels which were ordered at the peak of the market back in 2007-2008 should add to distressed asset sales, as their owners won't be able to repay them without huge losses. In essence, the researcher said that the current slowdown will see many ship owners out of the market and bankrupt, due to cash flow problems, as at the moment, they don't have the necessary cash reserves to survive the downturn, like they did back in 2008.
BIMCO's advice towards dry bulk ship owners they should expect the unexpected, as has been the lesson learned. "Maybe even India will begin to influence the market as a significant importer. This would fulfil the prophecy and release a vast potential that has been simmering for a very long time and provide a much-needed second major demand driver. Supplementing China as the dominant factor in the market would create a more sustainable freight market going forward. However, this will not happen in just one year; moreover it appears destined to remain a long and dusty road for several years to come. An optimist would surely name India as the best thing that could happen to the dry bulk shipping industry. In the meantime volatile iron ore exports and strong demand for thermal coal is likely to characterise India’s contribution to the dry bulk markets" concluded the organization.
Source: Nikos Roussanoglou, Hellenic Shipping
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Wednesday, 27 November 13
SHIP OWNERS ONCE AGAIN TURN TO DRY BULK CARRIERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners once again turned to more dry bulk carrier ordering over the course of the past week, as more and more appear convinced of the industry ...
Tuesday, 26 November 13
EWP INVITES COAL BIDS FOR 2014 - 2018 DELIVERIES
COALspot.com: Korea East-West Power Co. Ltd (EWP) invited bids to supply 130,000MT of min 5,600kcal/kg (Sub)-bituminous Coal on NCV basis for March ...
Tuesday, 26 November 13
NEWCASTLE COAL EXPORTS SLIP 22.62% W-W
COALspot.com: In the week ended November 25, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.26 ...
Monday, 25 November 13
THE SUB-BIT INDONESIA COAL SWAP MOVEMENT IN YEAR 2014 IS STILL FAR FROM PROMISING
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 2.54 pmt month on month on Friday 22 Novemb ...
Sunday, 24 November 13
CFR SOUTH CHINA COAL SWAPS FOR Q4' 14 DELIVERY PRICE SHOWS A NEGATIVE TREND WEEK ON WEEK AND FLAT ON D-D
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.13 percept d-d on Friday 22 November 2013. The CFR South ...
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- Lanco Infratech Ltd - India
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- The University of Queensland
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- IEA Clean Coal Centre - UK
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- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
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- Bhatia International Limited - India
- Commonwealth Bank - Australia
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- Energy Link Ltd, New Zealand
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- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
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- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
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- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
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- Goldman Sachs - Singapore
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- Ministry of Transport, Egypt
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- Trasteel International SA, Italy
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- GAC Shipping (India) Pvt Ltd
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- Kideco Jaya Agung - Indonesia
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- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
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- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
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- Power Finance Corporation Ltd., India
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- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
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- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
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- Mintek Dendrill Indonesia
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- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
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- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
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- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
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- ASAPP Information Group - India
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- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
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- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
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- MS Steel International - UAE
- Semirara Mining Corp, Philippines
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- South Luzon Thermal Energy Corporation
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